There are no ‘App-Solute’ solutions
By PROYASHI BARUA Q] IndiaMART recently announced its stance of not going app-only. Can you explain the business rationale behind this? We are not going app-only because our customers are not just app-only. A large chunk of people who transact on our sites use only desktops and this behavior is unlikely to change in the years to come. About 40% of our consumer base comprises small and medium entrepreneurs who are essentially the app savvy section. Interestingly, our observations and insights on consumer behavior have revealed that there is no app-dependency among any of the users who are conversant with apps. And this is not difficult to fathom considering the simple fact that the app experience is intrinsically dependent on mobile phones which can sometimes run out of battery and network at a crucial business moment. There is also cross usage of devices pointing to the level of technology adoption. When people upgrade to the latest technology they do not forsake platforms that they had previously engaged in. These insights coupled with the fact that in India only 10% of the mobile subscriber base owns smartphones is considerable to substantiate our decision to not go the app-only route. Q] What will be your marketing strategy to enter overseas markets? Which markets are you initially targeting and why? Any cultural and marketing synergies you see? It is actually fairly premature to talk about entry strategy into foreign markets. But yes, we have plans of international expansion and these will all be in non-English speaking countries. This is in keeping with our core marketing/business model. IndiaMART was fundamentally a platform connecting Indian suppliers to global buyers. So the supplier base was largely exporters. Approximately 80% of the buyer traction was from foreign markets – 200-plus English speaking countries spanning Europe, US and Australia. However, in the late nineties and early twenties, there were three trends that surfaced in the economy that were impossible to ignore and reshaped the business model of the company. First, India as an export hub did not garner much success – China showed far more promise. Second, with a GDP rate of 8 to 9% the domestic market had started booming and third, from an internet and online context there was a perceivable focus on local markets and local search results with Google setting the trend. Taking cues from these trends, IndiaMART reinvented the business model somewhere between 2007 and 2009 to focus majorly on indigenous buyers. Consequently, today 80% and more of the traction happens between Indian suppliers and Indian buyers. A unique proposition of the core business model is that the same small and medium-sized entrepreneur can leverage the platform both in the capacity of buyer as well as supplier. In a nutshell, the strength of our business model lies in facilitating business competencies in an intra country framework. We want to replicate this existing model when we enter foreign markets. And hence we intend to foray only into non- English speaking countries as the business and market matrix of such countries is similar to India and therefore offers the same business opportunities. Q] How do you plan to increase your visibility and brand forte for enterprises buying online? We see untapped potential in this segment, which till date has not been addressed by any online market player. Around 18-24 months ago while examining buyer testimonials (essentially testimonials from corporate house representatives who are in-charge of procurement mandates) we actually realised the magnitude of untapped opportunity in the enterprise domain. We understood that though sourcing is a huge industry there are no dedicated solutions. There is a sizeable chunk of 100 to 400 crore turnover companies who have annual sourcing needs estimating approximately 50 crore plus. Entities with this volume of sourcing requirements are significant buyers in the market and represent a substantial market opportunity to us. While engaging with them through our pilot projects we also realised that some of these big brands apart from sourcing also have selling needs. Moreover, we noticed that on the supplier side, the distributors and agents of several such brands are already there on IndiaMART, signaling a clear monetization opportunity. Q] What does your marketing mix look like? Which medium utilizes a major chunk of your advertising and marketing spends? Can you give a rough estimate of your spends? Is this likely to change in the coming year? In terms of channels within the marketing mix that absorb the maximum revenues, it is clearly television that takes the major pie. The ATL campaign of IndiaMART envisages safeguarding this leadership position. Hence, nearly 60 to 70% of marketing revenue is invested on television. We also invest 20 to 25% of our spends on digital that is very effective for lead generation. Digital marketing strategies are largely tactical and this medium is primarily leveraged for remarketing, retargeting and display among existing and potential users. In recent times, investments on mobile platforms have spiraled and infact about 20% of our online marketing spends have been on mobile alone. Newer and smarter technologies are giving an unprecedented fillip to branding initiatives in the mobile space. For instance, we have extensively used products like ad spruce (that enables creative showcasing of videos) and silver push that enables cross device retargeting. The use of outdoor is fairly conservative. We capitalize only on platforms of mega reach (for example DMRC wrapping) for our outdoor initiatives as it is extremely difficult to measure the ROI on outdoor. The current marketing mix has remained for some time and is unlikely to change in the coming year. Q] Are there any differentiated strategies while engaging with customers in Tier 2 and Tier 3 cities? Demography is actually a redundant consideration when it comes to market environments within India. Demand for a product is never determined by demography. In other words the same product can have equal demand from the metros and semi-urban areas. However, we have ascertained through our observations of specific user cases that people in hinterlands and ‘Hinglish’ speaking pockets of the country are constrained by their vocabulary while searching for products. To cite an example, the word turmeric is unknown to many people who search on our platform. Hence we have made a conscious effort to feed synonyms of the 25 million products retailed on our platform. Q] What are some of the interesting BTL activities that you have engineered to increase consumer engagement? We have instituted certain properties, such as ‘Leaders of Tomorrow’ in partnership with ETNow with the objective of garnering recognition for the small and medium entrepreneurs. Then we have partnered with Zee Business to launch a property called ‘Emerging Business Forum’ that is basically a platform where industry experts across domains that complement the SME sector converge to provide intelligence on business and operational issues like technology upgradation, micro finance, building global competitiveness etc. These are just some of the key properties of engagement. We have other similar tie-ups with industry bodies and financial institutions. ABOUT THE BRAND IndiaMART is a large online marketplace, connecting buyers with suppliers. Founded in 1996, its mission is ‘to make doing business, easy’. IndiaMART has been the proud recipient of the Red Herring 100 Asia Award in 2008, as one of the top promising Asian companies driving the future of technology. The commitment to bring affordable and low-cost solutions to the SMEs laid the foundation for this lowcost solution, which was bestowed with the Manthan Award in 2013 under the ‘E-business and Financial Inclusion’ Category. IndiaMART has over 3000+ employees located across 55+ offices in India and with customers spanning across 200 nations. Its existing investors include Intel Capital and Bennett, Coleman & Co. Ltd. FACTS CREATIVE AGENCY: BANG IN THE MIDDLE MEDIA AGENCY: LINTAS DIGITAL AGENCY: MAXUS DIGITAL PR AGENCY: VALUE 360 COMMUNICATIONS CMO FILE Sumit Bedi is responsible for leading the marketing, advertising, research and communication initiatives for the organization. He has played an active role in spearheading various brand building and product marketing efforts to lead the brand on a high growth trajectory. Prior to this, Sumit honed his skills at Info Edge India Ltd, serving as Associate Vice President, Marketing for 99acres.com. Sumit earned his PGDM from Indian Institute of Management, Bangalore after completing B. Tech from Punjab Engineering College. He is an avid reader, leadership and management being his favorite subjects. MARKETING TIP Stay focused on the long haul and think long term Feedback: proyashi.barua@exchange4media.com
Tags : e4m